Canada is a thriving, modern country with high living standards, excellent healthcare, good transport infrastructure and housing – making it a desirable location for expats from around the world, not least retirees looking for a new place of residence.
The natural landscapes offer a huge array of places to live, from contemporary cities to the solitude and peace of the Rocky Mountains. Retirees often choose British Columbia, with its mild climate and stunning mountain ranges, or the cultural city of Ottawa, Ontario, packed with museums, theatres and events.
In this guide from the Chase Buchanan Canadian team, based in Toronto, we’ll discuss the potential visas that may be suited to British retirees, what budget you might expect to require to cover your living expenses and some of the retirement planning considerations to bear in mind.
Applying for a Visa to Retire in Canada
Many of the primary visa routes available are focused on professionals and skilled workers who will make a contribution to the Canadian economy. The Canadian government also doesn’t have a specific ‘retirement visa’ as such – but that by no means infers that there aren’t visas available for retirees, particularly affluent foreign nationals who can comfortably cover their long-term living costs.
There are varied options depending on your plans and whether you have a child or spouse who is a Canadian citizen:
- Family or tourist visas are valid for six months per year, which entitles you to split your time between the UK and Canada, if appropriate. Second homeowners often choose a tourist visa, which permits them to open a bank account and purchase a residence.
- Retirees with Canadian relatives, including adult children, can apply for a permanent visa through the family sponsorship programme. This visa does not allow access to the universal healthcare system but permits a stay of up to two years.
- The parents and grandparents programme offers permanent residency, provided the applicant is sponsored by a family member – around 30% of foreign nationals living in Canada apply through this or a similar visa.
Another option is to consider a Start-Up Visa; these permits enable wealthy investors to apply for permanent residency and potentially onward citizenship by launching a business with incubator or angel investment funding. The Quebec Investor Immigration Programme (QIIB) differs slightly, with a minimum investment of $1.2 million (£700,000) and a non-refundable donation of $200,000 (£116,700) to Investissement Québec.
Under the QIIB, successful applicants, regardless of whether they are in or approaching retirement, must have a net worth of $2 million (£1.17 million) or above, and be able to speak French at a minimum proficiency level. They receive a work permit initially, which can be converted into permanent residence provided the investor remains in Canada for at least two years within the first five.
Average Living Costs in Canada for Foreign National Residents
Canada is an affluent, developed country, and while living costs naturally differ between the major cities and quieter towns and villages, you’ll find the average costs fairly similar to the UK. Most individuals require a monthly budget of around $1,446 (£844) excluding accommodation.
Across the two countries:
- UK consumer prices are just over 5% cheaper, although utilities in Canada are over 100% more affordable – including electricity, heating and water.
- Dining out at a Canadian restaurant costs roughly 1% less than in Britain, and public transport and taxi services are 23% and 15% lower than in the UK, respectively.
If you intend to buy a home or second residence in Canada, the costs will depend on where you choose to live and the type of property you’d like to purchase. As a rough guide, we’ve listed the average prices per square metre below in some of the most popular destinations.
We’ll look at taxation shortly, but you may also need to consult your financial adviser to help with key decisions around whether to retain a UK property, sell, or keep two homes in Britain and Canada. These options may impact your tax exposure and your long-term tax residency position.
Speak to an Adviser in Canada
An Overview of Taxes in Canada for British Expatriate Retirees
Before any international move, we strongly advise any expat to review their income, tax liabilities, investment portfolio, savings account and pension plans with an experienced tax adviser or financial consultant. There may be several options that offer tax efficiencies or provide the assurance that your income and assets will more than cover all of your living expenses.
UK State Pension retirees will continue to receive their benefits following a relocation but should note that they will not be eligible for an annual uplift linked to the ‘triple lock’ system. Instead, your State Pension income will be fixed at the rate payable on your departure date.
Like the UK, Canada assesses tax residency based on the time you spend in the country. Therefore, if you have a permanent home in Canada, remain in the country for most or all of the year, or have familial ties, you may be treated as a tax resident.
This tax situation means you will normally be obligated to file tax returns and pay taxes in Canada on your worldwide income and assets – which will typically include pension income you receive. However, some earnings may remain taxable in the UK, including rental income from a UK-based property.
Federal and Provincial Income Tax Rates in Canada
Canada’s federal government sets the national income tax rates, which currently start at 15% for incomes up to $53,359 (£31,146). Still, the considerable variances in additional provincial tax bands may mean that your choice of location will affect the amount of your pension plan income or other earnings you might be taxed upon.
For example, Quebec levies a top-rate provincial tax of 25.75% on incomes over $119,910 (£69,992), compared to an upper tax band of 11.5% in Nunavut and 13.16% in Ontario.
Therefore, careful planning, tax calculations and assessments of your position as a non-resident, tax resident or permanent resident are important and should be carefully considered before you move forward with your plans to retire in Canada.
*Information correct as at March 2024